The situations surrounding COVID-19 are very fluid as is the economic fallout, but economists are certain we are heading for a recession.
Dalhousie Economic Professor and former President of the Canadian Economic Association Lars Osberg warns “Right now the most pressing economic concern is we don’t know how long this recession will last.”
That inevitably means we will be feeling the hurt of COVID-19 for some time as a recession officially occurs when a nation experiences two consecutive quarters of negative growth.
Looking at the Canadian dollar Osberg thinks it will continue to struggle “The Canadian currency like virtually all currencies is tied to the U.S. dollar which is seen as a safe haven by many globally, so you see what we’re currently witnessing. The Canadian dollar struggles while the U.S. dollar rises.”
In the last month, the Canadian dollar has lost around six cents to the American dollar, it’s currently worth around $0.69 USD.
Key indexes have also witnessed record-breaking losses.
The TSX has lost around six thousand points since February 19 representing about a third of its value. The DOW has seen similar losses of around nine thousand points or twenty-two per cent of its value.
A particular concern of Osberg is those most vulnerable “It’s all well and good for someone like me to social distance at home but for the homeless or people living paycheque to paycheque they will undoubtedly feel this the most.”
Osberg says economists sit in a similar situation to many other fields, in that they simply need more information to fully understand the scope of the issues to come.
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